50 Competitive Intelligence Analysis Techniques

7 October 2013 | By Estelle Metayer

Analysis is often where the ball drops as far as competitive intelligence analysts are concerned. Yet this is the only way the team can truly extract insights from the data and the intelligence gathered, and have a chance to play a role in the company’s strategic planning process. You will find below 50 analysis techniques you should master. This is not a complete list, and it should be adapted depending on the strategic needs of your company, as well as the nature of your business.

Industry Structure and Competitiveness

1-SWOT*

A structured method to analyze both internal and external factors that are likely to affect a company’s success. This framework needs little introduction as it has been used and overused in virtually every strategic planning discussion I have been part of. I would caution analysts that SWOT might be useful to organize information, but certainly not to guide strategic decision making. It needs to be combined with the TOWS matrix to gain additional insights.

The SCP framework is process to understand how players’ behavior and external shocks can affect an industry’s future profitability and growth. It can be at times difficult to run as it requires executives to project into the future, but insights are real and lead to great strategic discussions.

This analysis helps one understand how an industry’s maturity and competitive position affects strategy. It compares two axes: industry maturity (ranging from embryonic, growing, mature, to aging) and competitive position (from dominant to weak).

Porter’s framework provides a checklist to analyze the competitiveness level of an industry based on the balance of power. When using it, do not forget it is only the start of your analysis. The next step includes defining which strategy would augment chances of success: cost structure strategy, differentiation strategy or integration strategy.

This analysis extends the five-forces framework by examining the role of complementors (companies from which customers buy complementary products or services) and their effect, which is the mirror image that of competitors.

This is a valuable method for analyzing the competitive position of an organization. It highlights two internal dimensions (financial strength and competitive advantage) and two external dimensions (industry strength and environmental stability) to determine the organization’s strategic position in the industry. The company’s strategic strength is then defined as aggressive, competitive, conservative or defensive.

This framework is used in the early phases of strategy development to describe the landscape and environment in which a firm operates ( PEST stands for Political, Economic, Social and Technological). Note: It is sometimes transformed into SLEPT (Social, Legal, Economic, Political, Technological), PESTEL (Political, Economic, Social, Technological, Environmental/Ecological, Legal), STEEPLE (Social, Technological, Economic, Environmental, Legal, Ethical), etc.

Future market size estimation and analysis

11-Evaluation and Estimation of the Market Size*

These techniques will allow you to calculate the size of the market even when no study exists or no information is publicly available. Many methods—from top-down to bottom-up and extrapolations from market segments—can be triangulated to get the correct answer. The main advantage of these analyses is that they lead to a good, solid strategic definition of the industry or market boundaries and helps highlight blind spots.

In microeconomics, supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in an economic equilibrium for price and quantity.

Growth path analysis

17-Three Horizons*

The Three Horizons framework provides a structure for companies to assess potential opportunities for growth without neglecting performance in the present. The concept was developed in the book, The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise.

The staircase approach is a method to map a company’s possible growth path by continuously compounding skills and options. I have used this framework extensively to either map a competitor’s past staircase (and hence anticipate future moves) or as a tool for a strategy team to brainstorm about strategic options.

The directional policy matrix allows you to pick growth avenues based on market attractiveness and company strength. It has also been called the GE matrix, as GE uses this analysis in its strategy process. It can be run qualitatively or quantitatively, depending on the learning style of your executives.

Frankly, I hesitated to include this analysis here. The BCG matrix is a framework to help decision making on existing product lines. Developed in the 1980s, it has been used to evaluate how a company should think about its portfolio based on two criteria: the relative market share of a product and the market growth rate. I won’t spend too much time on it as it often leads to erroneous decisions (niche strategies do not fit very well in here).

The Ansoff Matrix (first published by the Harvard Business Review in 1957) is sometimes called the Product/Market Expansion Grid. It shows four growth options for business formed by matching up existing and new products and services with existing and new markets.

The framework (developed by Donald Hambrick and James Frederickson) puts the economic logic at the center of the analysis. Four dimensions are analyzed: Arenas, Vehicles, Differentiators, Staging and Economic logic. Strategy is about making important choices, and the real power of a Strategy Diamond is that it integrates important choices into a bigger picture instead of as a piecemeal approach.

Its two axes—familiarity with market factors and technology or service—are both divided into new familiar and new unfamiliar. The market dimension refers to the amount of knowledge possessed by the diversifying company of various characteristics of the market and the competitors within it. Newness of a market is the extent to which the company has previously targeted it.

An organization's core competencies are its strategically important capabilities that are central to fulfilling its mission and providing an advantage in the marketplace. Core competencies are difficult for competitors to imitate, and they provide companies with a sustainable competitive advantage. This analysis often forms the first step into the Staircases to growth analysis.

Financial analysis ( for the non financial specialist)

26-ROCE Tree*

The ROCE Tree is a simple method to compare players in an industry and understand structural differences in performance. I like it allows you to simply present on a one-pager insights from both the balance sheet and income statement, and relate these to shareholder value. This is a great analysis for non-financial professionals to master.

When no information is available on the competitors’ costs, this analysis provides a structured approach to identify and calculate differences. It is helpful when one has no access to the actual competitor cost information (which is always the case), and allows an alternative analysis method. As you can imagine, there are not many companies advertising about how they do the analysis. This is one of the most powerful analysis tools I know—it helps anticipate product margins, bidding prices and sustainability of pricing strategy.

This is a model to look at a company from the outside and understand who the decision makers and those in situation of power. This is an extremely useful analysis for any analyst supporting a proposal and bid team, or working with sales.

Future Trends' Analysis

31-Alien Eye Analysis*

The futurist Edie Weiner suggests there might be only two kinds of intelligent life forms that do not suffer from educated incapacity: aliens from other planets and children. This analysis allows a management team to look at its existing company, products, and industry with a drastically new vision, allowing it to avoid blind spots. New realities emerge when looking at analysis with an unbiased view.

This analysis, spearheaded by Shell in the 1970s following the company’s inability to forecast future oil prices, allows a company to look at possible futures, develop a system to flag events, and prepare alternative action plans. There is abundant literature on the subject, so the sources below are just a starting point.

I include here tools that help map large amounts of information to identify trends and patterns.

More: there are so many resources online, that choosing has been a challenge. I like the light tutorial on how to analyze trends in Excel , an example of three data visualisation tools about macro-economic data hereand the list of visualization tools here.Complexity: High

34-Assessing uncertainty

A McKinsey framework of four levels of uncertainty can be helpful to select the right set of strategic tools.

This term comes from the chemical industry and describes the analysis of weak signals that might have led to an incident. The same methodology has been used sparingly by competitive intelligence analysis to pre-empt competitors’ moves: “In the aftermath of catastrophes, it is common to find prior indicators, missed signals, and dismissed alerts that, had they been recognized and appropriately...”

Source: Blue Ocean Strategy

37-Business Model Generation*

The excellent work by Alex Oesterwalder opens the door to companies that need to rethink their business model. It offers a practical step-by-step process to find new ways to create value and analyze a company’s current model.

Together, the strategic three Cs form the marketing strategy triangle, matching between the Company, (current and potential strengths and weaknesses), Customers (served and not served), and Competitors (current and prospective) needs to be considered.

One of the most difficult habits to develop in learning to drive a car is to beware of blind spots that area along the periphery of the car where we cannot see what’s happening. Despite the rear-view and side mirrors, there remains an annoying small area where passing vehicles or pedestrians cannot be seen. If you neglect your blind spots when changing lanes or turning, you put yourself and your car in jeopardy. A strategic blind spot analysis will help you identify if your management team is prone to such blind spots, and how to correct this.

This is a process to anticipate competitors’ likely moves by getting your executive team to play out various scenarios and responses as if they were the competitors themselves, responding to one of their strategic moves.

Often defined as “the study of mathematical models of conflict and cooperation between intelligent rational decision-makers,” game theory can provide a path of analysis to anticipate a competitor’s future moves. The approach involves distilling all possible analyses of a rival’s response to a particular strategic move into a sequential consideration of three questions: